it's been a while since we've had a talk on this.
What would you do about the problem?
Me? Fully privatise into accounts. Get the US Government to sell it's annuities to help pay for those who've partially invested already.
What annuities?
Anyway SS is a real problem to fix because of the way its funded. Today's workers pay today's retirees. The so-called trust fund contains only IOUs. In principle privatizing sounds like a good idea, but where will the funds come from to pay today's retirees? Right now SS taxes bring in more than the benefits paid out so the surplus could be put into private accounts. But that situation will only last a few years. After that the outgo will exceed the income and there will be no surplus available for private accounts. All of the SS taxes will be needed to pay current retirees. And in fact even more revenue will have to be taken from the general funds just to make up the shortfall. According to the treasury department, SS is underfunded by $6 trillion over the next 75 years and medicare is much worse off than that.
This is one of the problems with socialist programs like this. Its easy to get into them but nearly impossible to get out. And the problems don't become apparent until many years later, when its way too late to fix. That's one of the reason why I think of socialism as a deadly trap.
